Gov., GOP still clashing over budget

The first official sign surfaced yesterday that lawmakers and Gov. Jennifer Granholm are deeply divided over how to cut $433 million in spending to balance the state budget, with less than two weeks remaining before another potential partial government shutdown.

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Senate Majority Leader Mike Bishop (R-Rochester) accused Democrats of resisting spending reductions in some state programs despite cuts being part of a recent deal to raise taxes.

"We cannot allow a second government shutdown because one side refuses to honor its signed commitment to cut government," Bishop said in a statement.

Democrats responded by accusing the GOP of walking away from a budget agreement months ago.

"Citizens would be better served if the Senate Republicans refrained from firing off disingenuous press releases and instead continued negotiating the specific details of the agreement," said a joint statement issued by Granholm, House Speaker Andy Dillon (D-Redford) and Senate Minority Leader Mark Schauer (D-Battle Creek.)

It appears Democrats and Republicans are at odds over cuts to Medicaid - the federal-state health care program for the poor - and the Michigan Department of Human Services, which oversees welfare payments and day care assistance for low-income parents.

Republicans, for example, want to privatize more of the state's foster care system and end Medicaid coverage for 19- and 20-year-olds and people who get their benefits because they take care of a low-income child on Medicaid. Democrats instead favor dropping reimbursement rates to doctors and hospitals.

There also is disagreement over raising hunting and fishing license fees to help fund the Department of Natural Resources.

State government is running on a 30-day temporary budget, which was signed Oct. 1 after the Legislature ran out of time to enact a new full budget because of a fight over raising taxes.

The government was shut down partially in the early morning hours of Oct. 1 before a deal to raise the income tax, expand the sales tax to more services, cut spending and change the management of teachers' health insurance was completed. Granholm and the Legislature have been negotiating details of the spending cuts in recent weeks, but there have been no visible signs of progress.

At estimated $270 million in savings are expected in the $9 billion general fund, which covers state spending aside from K-12 education. About $160 million in savings are planned for the $13 billion school aid fund. State government gets another $20 billion in federal dollars.

Advocates for the poor yesterday warned that programs for low-income people will bear half the cuts to state departments, with the Department of Community Health and Department of Human Services looking at cuts of $132 million combined. Those departments and the prisons budget account for two-thirds of the general fund.

"It's very frustrating that once again, just days from an extended deadline, we have no budget to debate," said Sharon Parks, vice president for policy at the Michigan League for Human Services. "All we know is that programs for our low-income citizens have the biggest bullseye in the state right now."

Universities, community colleges and K-12 public schools are expected to get 1 percent more funding this year. That is less than a 2.5 percent inflationary increase proposed by Granholm.